Saturday, May 12, 2007

Rational Rationing 3

angry doc actually wrote this entry shortly after the previous one in the series, anticipating that his readers will ask how he plans to incorporate the idea of fairness in deciding how we distribute healthcare resources.

Let's look at the issue of individual responsibility for a start, specifically at smoking.

angry doc believes we can make a case for discriminating against smokers when it comes to distributing healthcare resources on the grounds that:

1. There is a known cause-and-effect relationship between smoking and diseases

We know that smoking causes a number of diseases including heart disease, strokes, chronic obstructive pulmonary disease, and lung cancer.

2. The choice to start and continue smoking is an individual one

We recognise that by imposing a minimum age for smoking, and while we actively try to persuade people from smoking by use of graphic warning on cigarette packaging and health education campaigns, we have not banned smoking outright. In addition, smoking is not an essential need.

Now in the context of a pooled risk system, angry doc thinks he is justified in proposing that those who willingly subject themselves to additional risk should contribute more to the pool.

How to implement this then?

First, we need to identify a list of 'gazetted diseases' for which a definite cause-and-effect relationship with smoking is proven.

Once we have done so, we can move on to the next step: define how smokers should 'contribute more to the pool'.

Currently we have a few tiers in our subsidised healthcare system: in the outpatient setting we have three rates for citizens, permanent residents, and foreigners (at 'full-', 'half-', and 'none-' subsidised rates, which in terms of consultation translates to about $8, $12, and $16 respectively), and in the inpatient setting we have three subsidised rates ('C-", 'B2-', and 'B1-" classes, which translates to 80%, 65%, and 20% subsidy of the total bill). For convenience, we will refer to the highest subsidy rate in each case as C, the next as B2, and the least as B1.

If we stick to the existing system, we can stipulate that non-smokers are eligible for C rate.

For smokers, we can stipulate that they are only entitled to B2 or higher rate for the first outpatient visit or hospitalisation once the diagnosis of a gazetted disease is made.

For subsequent visits or hospitalisaion, patients who have stopped smoking (or have stopped smoking for a specified duration) are still entitled to B2 or higher rate, but those who are still smoking will only be eligible for B1 or higher rate.

No smoker is denied healthcare, nor is there any discrimination in the treatment he receives.

Now the difficult part: how do we identify smokers?

Given the disincentive of being a smoker, it can be assumed that smokers will not be forthcoming or honest when asked about their smoking status. A more legalistic approach is required.

We can stipulate that all citizens and permanent residents (since foreigners are not entitled to healthcare subsidy) who wish to purchase cigarettes (or tobacco products) be required to make a once-off statutory declaration that he has been informed of the consequences of smoking (both medical and the proposed legal ones) and that he intends to start smoking and bear personal responsibilities for doing so.

Subsequently a smoker will need to produce a photo-ID each time he purchases cigarettes. Each purchase is logged.

A smoker can circumvent this system by getting someone else to buy cigarettes for him, but the person who does so will himself bear the consequences of being logged as a smoker. To prevent smokers from pooling their risk by having one 'designated smoker' buying for the rest, we may factor in the amount of cigarettes purchased over time into our consideration for subsidy (i.e. you can bear the risk for a friend by buying the cigarettes for him, but your co-payment rate will be higher if you are deemed a 'heavy smoker').

angry doc can already see some objections to this system:

1. It imposes a 'double jeopardy' on smokers, who already pay a duty for cigarettes

angry doc cannot deny that. Under the proposed system, a person is penalised for both his decision and the results of his own decision.

2. It infringes individual privacy and liberty

It infringes privacy, but not liberty. A smoker is still allowed to smoke if he accepts that he will receive less subsidy as a result of his decision.pathdoc raises other questions:"How many cigarettes a day for how long constitutes a smoker? How long must one stop smoking before he is considered a non-smoker? Is the smoker of a cigarette a day to be treated the same as one who smokes 100 a day? What about the type of cigarettes? Does the nicotine level matter? What about cigarette filters that claim to remove most of the tar?"angry doc thinks those answers can be answered objectively by looking at data on smoking and pathogenesis. We may need to further grade the co-payment rate based on how much one smokes, but overall he thinks the policy is sound.What do you think?

15 Comments:

Thanks for referring to my post.

There may be quite significant administration costs. All shop keepers will have to put in place a national IT system to capture data of all everyone who buys cigarettes. Supermarkets can handle that, but the small Indian shops will not be able to sell cigarettes, one of their main sources of income. You will need to have in place a system to change the status of a smoker if he stops for a period of time (not to mention how we verify that). More staff will be needed to administer the system. And are we going to tell the tourists that they are required to bring along their passports if they want to buy a packet of ciggies in Singapore? If you exempt foreigners, every local smoker will claim to be a tourist.

Will that bring more money into the healthcare system by charging smokers more? I haven't done the sums but I doubt it. Putting smokers into class B2 instead of C means we are reducing the subsidy from 80% to 65%, not very much...Are we sure it won't cost more to bring in the IT systems, staff and equipment at all the retail shops? You may have to push smokers into A/B1 class for the system to break even.

Ironically, the chronic smoker for 50 years who stops smoking for the past year because he is too breathless to puff a cigarette now may be re-classified as a non-smoker at his next hospitalisation.

The lawyers will be most happy I am sure...charging $80 each for a statutory declaration for all the smokers will bring in a tidy windfall.

Or more beneficial to the govt's coffers if they just raised cigarette tax to such a level that only the die hards would continue smoking?

Your idea is interesting, however it smacks way too much of "someone" knows best and imposes many controversial likely unpopular limitations on certain groups of people at the same time not benefiting the government monetarily.

Yes, it would be simpler to just ban cigarettes altogether. It has been suggested by doctors before, but I don't think it received an official response to it.

But anon @ 12:07 AM makes a valid point: 12% of Singaporeans smoke, but cigarettes duties brought in about S$677 million in 2006, or about 35% of the total government health expenditure that same year. In fact, expressed as a percentage of the subvention (which I believe translates to subsidy?), that figure rises to 43%. I am not sure how much subsidy they consume, but I dount it exceeds 43%.

So yes, this was a bad idea afterall. Perhaps we should just double our tobacco duties and hope the percentage of smokers remain constant...

(Personally I would like to see us raise the price of cigarettes to $50 a pack and see how many people will still think they can't quit.)

The problem is going to be where to draw the line. What's next? We all know things like poor diet and lack of exercise contribute to disease too. There is never going to be a system to track how many plates of char kway teow you ate this week.

I don't think means testing is difficult to implement in theory. Was just pondering on the bus, we already have figures for average cost/length of stay. A simple formula for e.g. an admission for hypoglycemia can be:Average cost of admission/[Annual income of self/caregivers-(fixed sum for each dependant)]*100%The amount of subsidy, say a minimum of ?40% to maximum of 80% can be pegged to these percentages on a sliding scale. To be fair, this figure should be obtained early in admission and proposed to patient and caregivers so they may choose subsidised care or not. If complications arise, and the cost/duration of admission exceeds that proposed earlier, the patient should be given a higher subsidy based on this new cost/be offered to downgrade if in paying class and subsequent fees at new subsidised percentage.

Means testing can work in principle. But i believe the reason why the authorities are hesistating is because aside from more revenue, it won't solve the problem of the gentleman on full welfare support with COPD from admitting himself every other day. It won't free up the bed from the lady waiting a week for the next available non-urgent ultrasound. It won't hasten the placement of the elderly gentleman waiting 2 weeks for step down care. Obviously where bed availibility is concerned, there are bigger culprits at large.

I guess the govt is cognizant of the most viable way to solve the tight constraint on Spore's health care resources, however the people managing the system are way too entrenched in profit maximisation; running spore health care industry just like any other private enterprise.

It is interesting to note that the same pool of people who contribute so much to Spore's tax revenue would be denied the most subsidies under the proposed system :)

Also, I never understood why despite paying such an exorbitant cost for a pack of cigarette and being incessantly ingrain the detrimental repercussions smoking has on one's health, we still witness such a high annual spike in the number of smokers here.

Discrimination against smokers and obesed persons are becoming the only socially-acceptable forms of discrimination in many parts of the world...

The crude prevalance of smoking in Singapore has actually be on the decrease. However, coupled with an increasing population, I am not sure whether that works out to more or fewer smokers on the island.

http://www.hpb.gov.sg/hpb/default.asp?pg_id=1287

Also, I believe the data is obtained from surveys, so there may be under-reporting.